CH140160 - Interest: taxes and duties covered

You must check whether, and from which date, the FA 2009 interest rules apply to the tax or duty you are dealing with. See below for full details.

Late payment interest and repayment interest apply to any amount that is payable

• by a person to HMRC, or
• to a person by HMRC, where
• that amount is payable ‘under or by virtue of an enactment’, see CH140240, and
• a Treasury Order has appointed a day from which the interest rules apply for a particular tax.

Eventually, all taxes, duties (other than customs duties), penalties and surcharges will be amounts that are subject to late payment interest and repayment interest because they are all due under or by virtue of an enactment. However, the interest provisions currently only apply to certain taxes and any associated penalties, see below. This is because they are the only taxes for which there is an appointed day from which the rules apply.

What the interest provisions currently apply to
What the interest provisions do not apply to

What the interest provisions currently apply to

The interest provisions currently apply to the following taxes, from the dates shown.

Where the interest provisions apply to income tax or capital gains tax, they also apply to Class 4 National Insurance Contributions (NIC) and student loan payments that are included in the tax calculation. 

Tax or duty	Date from which interest provisions apply
Bank payroll tax and any associated penalties	31 August 2010 see SI2010/1878
Construction Industry Scheme: Penalty under Paragraphs 7 to 13 of Schedule 55 Finance Act 2009	6 October 2011 see SI2011/2391
Income tax or capital gains tax: Any tax or other amount for which a return falls to be made under Section 8, 8A or 12AA TMA 1970. An assessment made under section 29 TMA 1970. And any penalties assessed in relation to that tax or amount	31 October 2011, see SI 2011/701
Amounts due under the PAYE regulations, including Class 1 NIC, Student Loan Deductions, and any penalties under paragraphs 6B to 6D of Sch55 FA2009 and paragraphs 5 to 8 of Sch56 FA2009	6 May 2014, see SI2014/992 and FA2019 r88(6)
Construction Industry Scheme Deductions and any penalties under paragraphs 5 to 8 of Sch56 FA2009	6 May 2014, see SI2014/992 and FA2019 s88(6)
Penalty under section 208 or 226 of FA 2014 (penalties relating to follower notices, accelerated payment notices and partner payment notices), where the penalty relates to income tax payable under PAYE regulations.	6 May 2014, see FA2019 s88(6)
Machine Games Duty including any penalties assessed in relation to that duty	1 February 2013, see SI2013/67
Annual tax on Enveloped Dwellings and penalties assessed in relation to that tax	1 October 2013, see SI2013/2472
All taxes: where a penalty is charged to a dishonest tax agent under, Parts 3 to 5 of Schedule 38 to the Finance Act 2012	1 April 2013, see SI2013/280
Stamp Duty Reserve Tax and any penalties assessed in relation to that tax.	1 January 2015, see SI2014/3269
Remote Gambling Taxes	1 January 2015, see SI2014/3324
Diverted Profit Tax and any penalties assessed in relation to that tax	1 April 2015, see SI2015/974
Soft Drinks Industry Levy and penalties assessed in relation to that levy	6 April 2018, see SI2018/468
Penalties under section 98C TMA 1970 or Regulation 22 of the National Insurance Contributions Regulations 2012 for the failure to comply with the disclosure of tax avoidance schemes	1 June 2019, see SI2019/918
Penalties under FA 2014, Sch. 35 (penalties for failure to comply with the promoters of tax avoidance schemes regime)	1 June 2019, see SI 2019/921) and FA2019 s88(3)
Penalties under and F(No. 2)A 2017, Sch. 16 (penalties for enablers of defeated tax avoidance schemes)	1 June 2019, see SI 2019/921
Penalties under F(No. 2)A 2017 Sch 17  (penalties for failure to comply with the regime for disclosure of tax avoidance schemes in relation to VAT and other indirect taxes)	1 June 2019, see SI 2019/921
Penalties under FA 2015, Sch. 21 (penalties in connection with offshore asset moves)	6 September 2019, see SI 2019/1238
Penalties under FA 2016, Sch. 20, Pt. 1 (penalties for enablers of offshore tax evasion or non-compliance)	6 September 2019, see SI 2019/1238
Penalties under FA 2016, Sch. 22, Pt. 1 (asset-based penalty for offshore inaccuracies and failures)	6 September 2019, see SI 2019/1238
Penalties under F(No. 2)A 2017, Sch. 18, Pt. 1 (requirement to correct certain offshore tax non-compliance)	6 September 2019, see SI 2019/1238
Amounts payable to HMRC under the disguised remuneration repayment scheme 2020, as established under FA 2020, s. 20	5 October 2020, see SI 2020/979
Capital Gains tax payable under paragraph 6 of Schedule 2 to FA 2019	6 April 2019, see paragraph 31 and 32 of Sch2 FA2019
Amounts payable under Part 3AA of Schedule 4 to the Social Security Contributions Regulations 2001	6 April 2021, see SI 2021/445
Amounts payable under section 688AA of ITEPA 2003 (Workers’ services provided through intermediaries: recovery of PAYE)	6 April 2021, see paragraph 29 of Sch 1 FA 2020
Public Interest Business Protection Tax (FA 2022, Sch 10)	6 April 2021, see paragraph 29 of Sch 10 FA 2022
Plastic Packaging Tax and penalties assessed in relation to that tax	1 April 2022, see SI 2021/1409
Value Added Tax and any penalties assessed in relation to that tax *but see  effect and exceptions below	1 January 2023, see SI2022/1277
Value Added Tax (Margin Schemes and Removal or Export of Goods VAT related Payments) and any penalties assessed in relation to those amounts	1 May 2023, see SI 2023/385
Economic Crime Levy and penalties assessed in relation to that levy	30 September 2023, see SI 2023/997
Penalties under FA 2022, Sch 14 (penalties in relation to electronic sales suppression tools)	4 March 2024, see SI 2024/133

 

Effect: VAT amounts and date from which the interest rules apply

• Value Added Tax (VAT) and VAT penalties which correspond to a prescribed accounting period, other than amounts within the exceptions - From the first prescribed accounting period starting on or after 1 January 2023
• VAT assessments under s80(4A) and 80B VATA94 (see VAEC4020 and VAEC5110) - Where the s80 claim to which the assessment relates corresponds to a prescribed accounting period starting on or after 1 January 2023.
• Debt to the Crown demanded under paragraph 5 Schedule 11 VATA94 (see VAEC9600) - Where the invoice was issued on or after 1 January 2023
• VAT penalties for the issue of incorrect issue of a certificate under s62 VATA94 (see VCP11310) - Where the certificate was given on or after 1 January 2023
• VAT regulatory penalties under s69(1) (see VCP11100) - Where the requirement (that the penalty is for the breach of) arose on or after 1 January 2023
• VAT regulatory penalties under s69(2) for failure to preserve records (see VCP11133 -  Where the penalty was assessed on or after 1 January 2023
• VAT Failure to Notify penalties under paragraph 2 Schedule 41 Finance Act 2008 (see CH70000) - Where the failure to notify occurred on or after 1 January 2023
• Penalties for VAT wrongdoing under paragraph 1 Schedule 41 Finance Act 2008 (see CH91350) - Where the unauthorised invoice was issued on or after 1 January 2023
• Any other amount of VAT or penalty assessed in relation to VAT  - 1 January 2023

Exceptions: VAT amounts the interest rules do not apply to (see SI2022/1298)

The interest provisions do not apply to import VAT that has not been (and is not required to be) accounted for under Postponed VAT Accounting  

Repayment interest does not apply to amounts of VAT claimed under the following provisions, unless claimed in a VAT return: 

(a) section 33 of VATA 1994 (refunds of VAT in certain cases); 

(b) section 33A of VATA 1994 (refunds of VAT to museums and galleries); 

(c) section 33B of VATA 1994 (refunds of VAT to Academies); 

(d) section 33C of VATA 1994 (refunds of VAT to charities within section 33D); 

(e) section 33E(2) of VATA 1994 (power to extend refunds of VAT to a specified person); 

(f) section 35 of VATA 1994 (refunds of VAT to persons constructing certain buildings); 

(g) section 36 of VATA 1994 (bad debts) in circumstances where the person making the claim is relying on regulation 166(2) of the VAT Regulations; 

(h) paragraph 19 of Schedule 9ZA to VATA 1994 (refunds in relation to new means of transport supplied to member States); 

(i) regulation 111(5) of the VAT Regulations (exceptional claims for VAT relief). 

These schemes generally concern ad-hoc claims of VAT that is recovered in respect of non-business activities or by a non-VAT registered person. Section 39 of VATA 1994 has bespoke interest provisions under certain conditions (see VROBP). 

What the interest provisions do not apply to 

The FA 2009 interest provisions do not currently apply to any taxes or duties that aren’t listed above. 

There is no intention to apply the interest provisions to customs duties. 

Even once the interest provisions have been extended to all taxes, duties, penalties and surcharges, they will not apply to late payment interest and repayment interest. This means that interest is not charged or paid on interest.